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Bonus vs Raise Calculator

See when a raise beats a bonus.

How it is calculated

The tool adds up the extra pay a raise gives over the years you stay and compares it with the bonus: raise total = annual_raise × years and difference = raise total − one_time_bonus. The bonus and the raise are dollar amounts: the raise is the extra gross pay per year, not a percentage, and years is how long you expect to keep the job, which may be fractional. All three must be zero or higher. A positive difference means the raise is worth more over that period; a negative one, shown with a minus sign, means the bonus is worth more. The sum is simple and flat: it does not compound later raises, discount future money or apply tax, and a raise that lifts bonuses or pension contributions is not captured. The break-even is bonus ÷ raise years.

Worked example

You are offered either a one-time bonus of 6,000 or a permanent raise of 2,500 a year, and you expect to stay 5 years. The raise brings 2,500 × 5 = 12,500 over that time. Compared with the bonus, 12,500 − 6,000 = 6,500. The tool prints a raise total of $12,500.00 and a difference of $6,500.00 in favour of the raise. The break-even is 6,000 ÷ 2,500 = 2.4 years; staying 2 years would give a difference of -$1,000.00.

Try this example →

Common mistakes

  • Typing the raise as a percentage. The field is dollars per year, so a 5% raise on 50,000 must be entered as 2,500.
  • Comparing a gross raise with a net bonus, or the reverse. Bonuses and salary can be taxed differently, so use gross for both, or after-tax for both.
  • Using a horizon longer than you will stay. The raise only pays while you remain at the job, so a short stay favours the bonus.
  • Expecting later raises to be included. The tool assumes the same extra amount every year; any further increase based on the higher salary would add to the raise side.
  • Reading a negative difference as an error. A value such as -$1,000.00 simply means the bonus is worth more over that period.

About this calculator

Employers sometimes offer a choice — or an implicit trade-off — between a one-time cash bonus and a smaller but permanent salary raise, and the better deal depends entirely on the time horizon. This calculator compares each path over a number of years: the bonus paid once at the start versus the yearly raise amount you enter, added up for every year of the period. It shows the raise's total, the difference from the bonus, and the bonus itself. The raise is counted as a flat annual amount; it does not compound or include future raises built on a higher base.

A bonus feels bigger in year one, but a raise keeps paying every year — and in real life it typically becomes the new baseline for merit increases and often for bonus and benefit calculations tied to base salary, which this simple comparison does not model. Employees use this comparison to evaluate a compensation offer with real numbers instead of gut feeling, especially when negotiating between the two options directly.

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